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House prices hit standstill in 'fragile and lacklustre' market

Seven regions across England and Wales reported a fall in prices in June, compared with just three in March, says Hometrack.

 
House prices hit standstill in 'fragile and lacklustre' market

House prices hit a standstill in June following three consecutive months of price rises, according to new figures from Hometrack.

Seven regions across England and Wales reported a fall in prices, compared with just three in March, while two recorded no change. 

London was the only region to see an increase in prices – boasting a modest rise of 0.3%.

Region Average price change
East Anglia -0.20%
East Midlands -0.10%
Greater London 0.30%
North East -0.20%
North West -0.20%
South East 0%
South West -0.10%
Wales 0%
West Midlands -0.20%
Yorks. & Humberside -0.20%
National 0%

‘Looking at price trends within regions, the survey shows that house prices were down across 23% of the country in June. This is almost double the level of price falls recorded over each of the last two months,’ said Richard Donnell, director of research at Hometrack.

‘The increase in the extent of price falls has been seen largely in southern regions outside London where prices are softening off a high base on weaker demand and growing uncertainty,’ he added.

The number of new buyers fell for the first time in five months as economic uncertainty and eurozone fears took their toll. Overall demand was down by 0.5%.

The number of new homes coming onto the market, on the other hand, has continued to grow – which means supply has outstripped demand for the past three months.

With demand set to fall further over the summer as the seasonal slowdown kicks in, the balance between supply and demand will likely widen – pushing down prices further, according to the property website. The Olympics are only likely to contribute further to this.

'The overriding story from the 1,500 respondents to the survey is of a fragile, lacklustre housing market where buyers remain concerned by the UK economy and wider eurozone. This echoes the "large black cloud of uncertainty" comments by Bank of England Governor Mervyn King in his recent Mansion House speech,' Hometrack concluded.

The news comes as government figures reveal that house prices in London have risen some 7.7% over the last twelve months, compared to the likes of Yorkshire and the Humber and the North East which have seen falls of 3.9% and 3.5% respectively. London also reported the biggest monthly increase in May, with prices up 2.6%.

This brings the average house price in England and Wales to £161,677, said the Land Registry.

Last week, meanwhile, Nationwide figures showed a 0.6% fall in house prices, while earlier this month Rightmove reported a 1% increase in prices.

4 comments so far. Why not have your say?

Dennis .

Jul 02, 2012 at 11:55

Surely this is a good thing. The sooner that house prices return to sensible levels the better for all of us. If you go an a historic 3 or 4 times average salary then the average starter house should now cost about £80K. Current price are still about double what they should be which is why nothing is selling.

Times were difficult in the 70's but people could still afford to buy houses. The same house I bought in 1973 at 3.5 times average salary is now up for sale at 10 times average. This can't be right.

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fatcat

Jul 02, 2012 at 13:42

I am not sure "nothing is selling" You should take a look at central london and the prime surrounding areas where most are going to sealed bids over asking price. sold two boxes on the river last month but I admit not to locals. lots of

euro money pouring in!

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Dennis .

Jul 02, 2012 at 14:09

Perhaps it's different in London but I live in a "desireable" Dorset village and nothing has moved here for ages. Some properties have been on the market with multiple agents for several years.

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purplelite

Jul 02, 2012 at 18:23

Same thing in my part of Essex Dennis. Either on market for a year or two and then withdrawn or a very few of the very choice ones sell on an offer that is usually some way off the asking price. All in all not many sales!

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